Feelings are Number One Driver of Consumer Loyalty, Qualtrics Research Finds

Customers who were delighted were 10 times more likely to recommend a brand than those who felt upset

When it comes to loyalty, the way a person feels after interacting with a company is more important even than whether they were able to successfully do what they wanted to do, according to new research from the XM Institute at Qualtrics (Nasdaq: XM).

Feelings trump other drivers of brand loyalty, including effort and success, according to results from the annual US Consumer Benchmark study of more than 9,000 consumers. Successfully accomplishing their goal impacted brand loyalty least. Despite the importance of feelings, brands aren’t performing as well in that crucial metric - consumers said they were more likely to succeed and have an easy time accomplishing their goal with a company than they were to feel good about it.

The financial impact of losing customer loyalty is significant. In the US, $1.9 trillion of sales are at risk after consumers have a bad experience¹. In times of economic uncertainty, companies that understand what their customers want and are able to deliver that experience stand to strengthen their market share by retaining or even growing their customer base.

“As the US confronts the possibility of a new economic reality after years of sustained growth, higher prices and fears of a recession will push customers to take stock of where and how they are spending their money, making it critical for brands to deeply understand their customers to keep their business,” said Bruce Temkin, head of Qualtrics XM Institute. “Now is the time to intensify your focus on understanding and responding to your customers’ feelings, and to identify any of their shifting needs that may be going unmet. Brand loyalty is a multifaceted effort, and companies that don’t address all angles risk losing customers.”

After years studying the impact of the customer experience, Temkin recommends the following:

• Be authentic and act with empathy instead of relying too heavily on scripts and templates.

• Empower frontline workers to directly resolve a customer’s problem.

• Focus on the entire customer journey to provide essential context for issues with individual interactions.

• Learn from customer feedback and adapt to their unmet needs.

Key findings from the study:

• Consumers who felt “delighted” by their experience with a brand are 10.3 times more likely to recommend it than those who felt “upset.”

• Other factors still impact consumer loyalty. Consumers who say it is “very easy” to interact with a brand are 8.1 times more likely to recommend it, and consumers who “completely succeeded” are 6.3 times more likely to recommend a brand.

• Consumers are nearly five times more likely to both trust and buy more from a company if they had a positive experience compared with a negative one.

• The impact of feelings varied by industry. In the health insurance industry, feeling good made consumers 15.6 times more likely to recommend a brand. In streaming media brands, feeling good increased the chances of a recommendation by 6.6 times.

Methodology

As part of the annual US Consumer Benchmark study, the XM Institute at Qualtrics asked a demographically representative online panel of US consumers that recently interacted with companies across 22 industries about the level of success, effort, and emotion they felt from that interaction and how likely they are to recommend, forgive, trust, and buy more from that company. The study was conducted in the third quarter of 2021. The total number of respondents was 9,055. Data was only calculated for companies that had 100+ respondents who had an interaction with that company in the last 90 days.

About Qualtrics

Qualtrics, the leader and creator of the experience management (XM) category, is changing the way organizations manage and improve the four core experiences of business—customer, employee, product and brand. Over 16,750 organizations around the world use Qualtrics to listen, understand and take action on experience data (X-data™)—the beliefs, emotions and intentions that tell you why things are happening, and what to do about it. The Qualtrics XM Platform™ is a system of action that helps businesses attract customers who stay longer and buy more, engage employees who build a positive culture, develop breakthrough products people love and build a brand people are passionate about. To learn more, please visit qualtrics.com.

About XM Institute

Qualtrics XM Institute is the world’s premier resource for experience management (XM) professionals. Led by industry visionary Bruce Temkin, XM Institute’s faculty researches trends and emerging practices in how organizations interact with their key stakeholders, including suppliers, employees, customers and partners. XM Institute also leads XM Pros, a thriving global community of more than 6,000 XM leaders who participate in an ongoing calendar of monthly events. The Institute maintains the XM Professionals Certification, the gold standard credential in the field. To access the latest XM content or for more information about XM Institute, please visit xminstitute.com.

¹https://www.xminstitute.com/blog/bad-experiences-risk-sales/

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“Now is the time to intensify your focus on understanding and responding to your customers’ feelings, and to identify any of their shifting needs that may be going unmet." — Bruce Temkin